You Need To Make $53,000/Year To Buy A House In Montreal, $125,000/Year In Toronto
Being in the highest percentage of earners in Canada helps a lot.
A study conducted by Zoocasa reveals that you need to be in the highest percentage of earners if you want to buy a house in Canada. This is terrible news for any young people who are thinking of buying their first home, as most can't even scrape enough money for a retirement savings plan.
The study analyzed how much income prospective buyers require to afford the basic home in their city. Their methodology assumed a 20% down payment at a 3.75% mortgage rate over 30 years. Benchmark house prices were sourced from various real-estate websites.
In many Canadian cities, you need to be in the top 10% of income earners to be able to afford an apartment, let alone a house. In Vancouver for example, you need to be in the top 2.5% to afford a place. Yikes.
Montreal fares way better compared to cities like Vancouver and Toronto but just barely. Here are the stats.
Potential homeowners in Toronto need to be in the top 10% of overall income earners. According to the data, the average price for a home in Toronto is $873,100.
This means that you need to have a salary of at least $124,554 dollars per year to be able to afford a house. Basically, you need to make $60/hour. Unreasonable, eh?
If you're looking to buy a condo, your prospects are a little better. The average condo price $522,300. Therefore, you need to make at least $74,476 per year or $36/hour.
In Montreal, the prospects are a little more encouraging. According to the data, the average house price is $375,000. You don't have to be in the top 10% of income earners, rather, if you're in the top 50%, you're good.
Income wise, you need to make at least $53,472 per year or, $25/hour. That's not so bad compared to the rest of Canada. In fact, Montreal is among the most affordable in the country.
For condos, the average price in Montreal is $296,600. Meaning that your salary needs to be at least $42,293 per year or $20/hour. At that price, you might as well buy a house, right?
What does this all mean for your future? If you're planning to buy a house, don't move to Toronto or Vancouver unless you're super rich.
If you aren't amongst the elite earners, maybe stay in Montreal or move to the Prairies where the housing prices are among the most affordable in the country.